23rd Jul 2014 14:11
LONDON (Alliance News) - Vedanta Resources PLC Wednesday said its subsidiary Cairn India Ltd has seen a large drop in profit after tax in its first quarter, despite an increase in revenues, after the company changed its method of depreciation.
The company's Indian oil and gas exploration and production subsidiary said its profit after tax fell 67% to USD183 million for the three months ended June 30 from USD561 million in the previous year as the company changed its method of depreciation from the straight line method to the unit of production method.
However, the subsidiary said its revenues increased 3% to USD750 million from USD728 million due to higher volumes of production, which reached an average daily gross rate of 217,869 barrels of oil equivalent per day during the quarter.
It also continued with its exploration programme with all seven new exploration and appraisal wells during the period finding hydrocarbons, upcoming up potential resources for the company.
"In line with our vision to contribute to the nation's energy security, we are confident of not only achieving the stated exploration target of 3 billion barrels of hydrocarbons in-place, ahead of schedule, but also of adding another 3 billion barrels to our un-risked prospect inventory," Cairn India Interim Chief Executive Sudhir Methur said in a statement.
The news comes after Vedanta Resources announced on Monday that post-tax profit fell at its subsidiary Hindustan Zinc Ltd during its first quarter despite higher zinc prices leading to an increase in revenues.
The India focused-oil and metals company said Hindustan Zinc's post-tax profit fell 3% to INR16.18 billion for the three months ended June 30 from INR16.60 billion the previous year.
Hindustan Zinc said its revenues increased 1% to INR29.63 billion from INR29.39 billion as a 22% fall in silver revenues was offset by strong lead and zinc sales during the period due to higher prices.
However, the subsidiary saw a fall in earnings before interest, taxation, depreciation and amortisation by 10% to INR13.52 billion from INR15.06 billion with volumes falling across all of its metals.
Vedanta Resources shares were up 0.7% to 1,120 pence on Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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